[bobwyman]

The reason there are few Googles or Microsoft's, etc. has more to do with the structure of competition and markets than it does with the factors outlined in your essay.

The reality is that the companies that grow largest are those that foster the growth of an eco-system of smaller dependent companies. The large "focal point" companies, by the nature of their particular market disruption, create opportunities for others to grow new businesses or do old businesses better. But, at the same time that they create opportunity, they limit it (intentionally or not) by ensuring increased competition for the dependent companies.

Creating opportunities means lowering barriers to entry and lowered barriers means increased competition, lowered returns and limited capacity to grow as large as the "focal point" or "platform" company that creates the opportunities.

If anything, VC's have been too liberal, not too conservative, in funding companies. I recently wrote about this at some length. Please consider reading my post at: http://bob.wyman.us/main/2008/04/liquidity-and-c.html

bob wyman